Short Sale Tax Relief Expires December 31, 2012

The tax relief law that allows certain qualifying homeowners to exclude from income certain debts that have been forgiven by their lender is set to expire December 31, 2012.  Why is this important now?  Because it can take up to 6 months to receive formal short sale approval and close a short sale escrow.  

According to a recent article in the Los Angeles Times, when this provision expires Sellers who participate in short sales  WILL have to report the debt relief they receive from the short sale lender as income on their federal tax returns.  As of today, the tax break is not extended, so time is of the essence …

The following are the main items that escrow looks at/needs when processing a short sale:
1.  Short Sale Addendum to the Purchase Contract
2.  Real Estate Commissions
      a.  Escrow will use the Short Sale Approval letter to determine permissible broker commissions (regardless of what the listing agreement states)
      b.  MLS should provide clear provisions  for short sale lender commission changes
3.  Written Short Sale Approval Letter
      a.  Escrow will verify that the Sales Price and Proceeds amounts match what is stated on the Short Sale Approval letter
      b.  In the case of proceeds to the Lender, escrow will confirm that they receive, at a minimum, the amount stated on the Short Sale Approval letter
      c.  Escrow must close within the stated timeframe or an extension and an updated Short Sale Approval letter will be required

In order to prevent closing delays, Sellers should be made aware of the fees that Short Sale Lenders may not approve and/or require additional information (see a limited, non-inclusive list below).
•      Short Sale Negotiator Fees
•      Home Warranty
•      Retrofit Work *
•      Termite Work *
•      Delinquent Property Taxes**
•      HOA fees***

*   Short Sale lenders typically approve the inspection fee but not the actual retrofit or termite work
**  Resubmission to the short sale lender for a revised short sale approval letter may be needed (and may cause closing delays)
*** Short Sale lenders may approve payment of HOA dues but not always approve delinquencies or certain other HOA fees such as Transfer fee or Document Fee

Typically when the Short Sale Lender does not approve the Seller’s payment of certain escrow/closing fees, the costs may be paid for by the buyer provided its permitted in the Short Sale Approval letter.

This post highlights only some of the provisions of the bill , please revert to the actual bill for specific information
http://www.govtrack.us/congress/bills/110/hr3648/text

For Buying or Selling, it helps to have a guide that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.

California Homeowner Bill of Rights signed into law

California Governor Jerry Brown signed into law the Homeowner Bill of Rights to help struggling Californians keep their homes. This law aims to avoid foreclosure where possible to help stabilize California's housing market and prevent the other negative effects of foreclosures on families, communities, and the economy. The new law will generally prohibit lenders from engaging in dual tracking, require a single point of contact for borrowers seeking foreclosure prevention alternatives, provide borrowers with certain safeguards during the foreclosure process, and provide borrowers with the right to sue lenders for material violations of this law.

Making sense of the story:

• The Bill of Rights prohibits “dual track” foreclosures that occur when a mortgage servicer continues foreclosure while also reviewing a homeowner’s application for a loan modification.
• Under the new law, homeowners must be provided with a single point of contact when negotiating a loan modification.
• It expands notice requirements that must be provided to a borrower before taking action on a loan modification application or pursuing foreclosure.
• Additionally, the bill allows injunctions against foreclosure until violations are corrected and permits civil penalties against servicers that file multiple, inaccurate mortgage documents or commit reckless or willful violations of law.
• These new laws make California the first state in the nation to take provisions in the National Mortgage Settlement, which covered the nation’s five largest mortgage loan servicers, and apply those rules to all mortgage servicers.
• The law will go into effect January 1, 2013.

Read the full story: http://on.car.org/N3TUdT

For Buying or Selling, it helps to have a guide that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.

Tips for the Moving Day!

Moving can be a stressful time, however, there are several things that you can do to make your move a smooth one. If you know that you're moving ahead of time, it's a good idea to start packing as early as possible. Remember, Rome wasn't built in a day and, unless you have to be out in a hurry, it's better to take your time and remember every little detail now than to find yourself with the moving blues later.

A Little Goes A Long Way

If at all possible, pace yourself when packing. It's better to pack a little at a time and make sure that nothing is forgotten than to hurry and try to get everything done within a day or two. It's easy to forget to have your address changed, turn off your phone, internet, water and/or cable service, so take the time to make sure every little detail is ironed out now so that you can enjoy your new home later.

Have A Moving Sale

Get rid of everything that you don't need by having a moving sale. If you haven't used it within a year, sell it. Otherwise, you will just end up with the same clutter in your new house as you've had in the one you're leaving behind. Plus, the more you sell, the less you will have to pack and move. Not to mention, moving is expensive and there's nothing wrong with earning a few extra bucks whenever possible.

Create A Packing List

It will help you to remember things much easier by writing them down on paper as they come to mind. A packing list can act as a shopping list, which will remind you of the things that you need to remember.

Pack Lightly

Moving day is hard enough, so don't make it any worse by loading down your arms with too much weight. If you pack lightly, it may cost you a little more footwork, but your body will thank you at the end of the day.

Pack Smart

Because of their design, boxes are easier to carry and provide an effective way to keep everything stored safely in its place. Rather than just piling everything into the car or U-Haul and hoping for the best, take the time to pack everything carefully (especially breakables) inside of a box. What will not fit, such as furniture and other household essentials, should be tied down and placed in a moving truck. Furniture pads are also a good idea to prevent damage during the move. Make sure you label each box with the contents of each box along with the room it will go in at the new home. This will make unpacking more efficient and save you time.

For Buying or Selling, it helps to have a guide that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.

8 reasons FSBOs should list with a Realtor

Ask yourself: What would Colby Sambrotto do?
By Bernice Ross


Here are some of the key factors that deter most homeowners from selling without an agent.

1. The decline of print advertising as a major lead generator
In the past, newspaper ads would produce a fair number of calls on FSBOs. Today, a three-line ad in the local newspaper has little chance of competing with the wide array of information online, including video, color photos, 360-degree virtual tours, and a wealth of community and lifestyle data.

2. Buyers seek rich content
IDX and VOW solutions, Realtor.com, Trulia and Zillow provide access to virtually all the listings in most market areas. Most buyers comb these major sites simply because it's more efficient than searching for single properties.

3. Instant gratification
A third problem for FSBOs is that people who surf the Web usually are seeking instant gratification. In fact, most visitors will only visit a website once and stay for 15-30 seconds. If the FSBO has no strategy for capturing the lead's contact information or for immediately following up, the lead moves on to the next website. Even if the Web lead does contact the FSBO, unless the buyer gets back to the FSBO quickly, that lead is gone.

4. Buyers want the savings
Even for those who do search for FSBOs, most buyers automatically deduct 6 percent from the sales price because they want the savings in their pockets, not the seller's. The result is that many FSBOs end up selling for up to 20 percent less on average as compared with sellers who hire a Realtor.

5. The needle-in-the-haystack effect
A major challenge for FSBOs is the needle-in-the-haystack nature of the Web. There are millions of websites including the hundreds of thousands of company and agent sites. Without search engine optimization, meta tags and a host of other branding strategies to achieve high Web placement, the probability of the Web buyer finding the FSBO's single listing online is small.

Of course, the buyer could post on sites such as ForSalebyOwner.com, ByOwnerMLS, or utilize the "Make Me Move" feature on Zillow. The challenge is that unless the buyer specifically wants to purchase a FSBO, it's much more efficient to search on the brokerage or MLS sites.

The FSBO could also put his home on Craigslist. There are two challenges, however. First, the FSBO has to repost the ad regularly for it to appear near the top where it can be found. Second, there have been so many rental scams and unsavory people using that site to identify targets for possible criminal activity that listing there could be a major safety issue.

6. Web leads are reluctant to share contact information
Another issue FSBOs must face is that most Web buyers are reluctant to provide contact information to a stranger, especially during the search process. Instead, buyers identify homes they want to see and then normally contact a single agent who can show them everything they want to see, not just a single home.

7. Availability for showings
Because FSBOs don't have lockboxes, that means the FSBO will need to be present for every showing. There are numerous challenges with this situation, the most important of which is safety. Is the person who wants to see your house legitimate or not? Even if you accept an offer from a potential buyer, how do you know whether the person meets the income and credit requirements to close the deal?

8. The proof is in the pudding
Here's a great closing question for sellers who believe that becoming a FSBO is a smart move. Did you know that Colby Sambrotto, founder of ForSalebyOwner.com, which is one of the most popular and robust FSBO sites on the Web, ended up listing his home with an agent AND paying a full commission?

If he couldn't get the job done for himself using his website, how effective do you think this approach will be in getting your home sold for the highest possible price in the shortest amount of time?

For Buying or Selling, it helps to have a guide that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.

5 signs that it's a good time to sell

Why desperate homeowners could find relief this year
By Dian Hymer
Inman News®

Traditionally, most homes have sold during the spring months. In the current volatile housing market, the time of year is not the most reliable predictor of the best time to sell.

Homes certainly show better in spring than they do on a dark and dreary winter day. Lately, however, weather patterns are hard to predict.

The weather has some effect on home sales. It can slow things down if incessant rain keeps sellers from being able to prepare their homes for sale. However, a bigger influence on the housing market is the overall economic situation and its impact on buyers' psyche.

Normally, the home-sale market ramps up in March or April and stays busy until the beginning of July when the market tends to slow down for the summer. The 2011 home sales went counter to this. The market was active at the beginning of the year, but stalled in April. If you waited until spring to sell last year, you would have missed the best selling opportunity of the first half of 2011.

The early slowdown was partially due to the expiration of the homebuyer stimulus package. The homebuyer tax credit program accelerated home purchases creating a mini bubble in 2010 that was followed by a significant slowdown in home sales.

Negative economic news played a big part in the sluggish home sales during most of last year. The stock market was unpredictable, and the earthquake in Japan had repercussions for many industries. Plus, Greece was on the brink of bankruptcy, and the future of the European Union was in doubt.

Bad economic news and massive uncertainty lowers consumer confidence. Buyers need to have jobs, but they also need to feel confident in their future to take on a major purchase like a house.

HOUSE HUNTING TIP: The best time to sell is when consumer confidence is on the upswing; interest rates are low; unemployment is decreasing; the economic news is mild; and there are more buyers in your local market niche than there are sellers. A high-demand, low-inventory market gives sellers an edge.

The Conference Board Consumer Confidence Index fell in March 2012 to 70.2 (1985=100), down from 71.6 in February, when it was up sharply.

Lynn Franco, director of The Conference Board Consumer Research Center, attributed the improvement in consumer confidence in February to less pessimism about current business and employment conditions and more optimism about the short-term outlook for the economy and job prospects despite a rise in gas prices. Franco said the moderate decline seen in March was "due solely to a less favorable short-term outlook."

Interest rates are currently at historic lows and are expected to stay low for the rest of the year. Even with low rates, buyers have had difficulty qualifying due to rigid mortgage approval underwriting.

Capital Economics, an analytics firm, expects the housing crisis to end this year partially due to lenders loosening credit. According to Capital Economics, one indicator of loosening is that banks are now lending 82 percent of loan-to-value (LTV), compared with a low of 74 percent LTV reached in mid-2010. This means qualified buyers need less cash to buy, which should lead to more sales this year, although higher home prices are not expected.

These positive indicators combined with a drop in homes for sale at the end of 2011 and a decrease in unemployment may provide an opportunity for sellers in spring 2012, provided their homes are priced right for the market. A major surprise on the economic front could change the picture.

THE CLOSING: Regardless of the economic indicators, the best time to sell is when the time is right for you.

For Buying or Selling, it helps to have a guide that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.

Apartment Vacancies Decline in U.S. to Lowest Rate Since 2001

By Hui-yong Yu

Apartment vacancies in the U.S. fell to their lowest level since 2001 as home seizures and a growing pool of young adults forming households boosted rental demand, according to Reis Inc. (REIS)

The vacancy rate fell to 4.9 percent in the first quarter from 6.2 percent a year earlier, the New York-based property- research company said in a report today. It was only the third time since Reis began gathering the data 31 years ago that the rate was less than 5 percent.

While low vacancies are helping to boost the performance of apartment properties nationwide, “risks may manifest later in the year” as multifamily developers pick up the pace of construction to take advantage of rising rents, Victor Calanog, head of research and economics at Reis, said in the report. Photographer: Chip Chipman/Bloomberg
.Renters are competing for a tightening supply of units as more homeowners are displaced by foreclosures, stricter mortgage-lending standards block purchases and young people move out on their own. In the three months ended March 31, 7,342 apartments became available, the fewest number of completions since Reis began publishing such data in 1999.

When vacancies drop below 5 percent, “effective rents tend to spike as landlords perceive that tight market conditions allow for greater pricing power,” Reis said in the report.

Effective rents, which take into account such landlord concessions as a free month, climbed almost 1 percent from the previous quarter to an average $1,018, the largest increase since the last recession began, according to Reis.

While low vacancies are helping to boost the performance of apartment properties nationwide, “risks may manifest later in the year” as multifamily developers pick up the pace of construction to take advantage of rising rents, Victor Calanog, head of research and economics at Reis, said in the report.

Reis expects about 70,000 units to open for leasing this year, about double the supply growth in 2011. Next year, the firm forecasts 150,000 to 200,000 new units in the 79 primary markets it tracks.

For Buying or Selling, it helps to have a guide that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.

Down the Drain: Garbage Disposal Dos & Don'ts

If your kitchen has a garbage disposal, you know how easy it makes mealtime clean up. But what you may not realize is that your disposal comes with some pretty important rules. Here are some of the most vital:

Do:
- Insert food slowly. Stuffing it all into your disposal at once can cause clogs and shorten the life of your system.
- Grind hard materials. Many people think food like chicken bones or small fruit pits are a no-no, but they can actually help clean the walls of the disposal.
- Use cold water for at least 20 seconds. This will solidify grease so that it can be ground up. Also, make sure that all food particles are washed completely down the drain.
- Keep it clean. One good way to eliminate drain smells is by grinding citrus fruit peels. You can also add a few drops of dish soap and let the disposal run for a few minutes.

Don't:
- Use hot water. This will make grease liquefy and build up, which can clog the drain.
- Grind fibrous or expandable foods. The former, like celery stalks and onionskins, can tangle up the disposal. The latter, like pasta and rice, can clog it.
- Turn off the motor too quickly. You'll want to make sure all food particles are completely ground. Once done, continue to run the water for at least 15 seconds to flush out particles.
- Wash coffee grounds down the drain. While they won't harm the disposal itself, they can clog pipes and drains.
- Forget to use it. Lack of use can cause rusting and corrosion, which can lead to premature system replacement.

For Buying or Selling, it helps to have a guide that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.

Warren Buffett: I'd Buy Up 'A Couple Hundred Thousand' Single-Family Homes

Appearing live on CNBC's Squawk Box, Warren Buffett tells Becky Quick he'd buy up "a couple hundred thousand" single family homes if it were practical to do so. If held for a long period of time and purchased at low rates, Buffett says houses are even better than stocks. He advises homebuyers to take out a 30-year mortgage and refinance if rates go down.
-- “Warren Buffett on CNBC,” by Alex Crippin, CNBC, Feb. 27, 2012.

Warren Buffett is recognized as one of the most successful investors in the world. His recent comments on CNBC reflect how he feels about the opportunity available for all of us in the housing market.

This type of commentary is starting to show up in more and more places as people recognize the real value in today’s housing market. Buffett indicated that if you know where you want to live for the next five or ten years then there is no question you should buy and you should buy now.

One of the most important factors in buying a home is the mortgage. With interest rates at the lowest level in more than fifty years, mortgage payments are actually less in many cases than the rent you would pay for a comparable property. Investing in yourself instead of your landlord is another reason for getting into the game before these low rates are history.

A recent article on MSN Real Estate echoed Buffett’s comments. The article entitle “Should buyers take the plunge this spring?” by Melinda Fulmer cited increases in home sales, decline in inventory, home prices being 10% below rents and banks willingness to lend as reasons why it might be time to become a home owner.

Buffett hit the key in his interview saying that he would be a buyer because of the value that is available.

Maybe it’s time to take Warren’s advice.

For Buying or Selling, it helps to have a guide that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.

10 Easy Upgrades to Add Style & Value to Your Home

Sometimes, it’s the little things that make the biggest difference in the value and appeal of your home. Whether you’re trying to sell your home of just spruce up the place, here are 10 easy ways to get started.

- Update hardware on cabinets and drawers
- Replace towels and rugs in the bathroom(s)
- Add overhead lighting or wall sconces to brighten rooms
- Declutter small spaces and closets with DIY storage kits
- Wash or power wash the exterior of your home (especially windows)
- Add area rugs to throw in a hint of color
- Hang a mirror in small rooms to give the illusion of more space
- A fresh coat of paint on walls and trim brighten any room
- Try a fresh new color on your front door for character
- Mow and mulch your lawn even in the cooler months

Make a plan. Set a budget. Get started!

For Buying or Selling, it helps to have a guide that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.

Pending home sales near a two-year high, boosting views on housing market

By Derek Kravitz

WASHINGTON -- The number of Americans who signed contracts to buy homes rose in January to the highest level in nearly two years, supporting the view that the housing market is gradually coming back.

The National Association of Realtors said Monday that its index of sales agreements rose 2 percent last month to a reading of 97. That's the highest reading since April 2010, the last month that buyers could qualify for a federal home-buying tax credit and the last time the reading was above 100.

A reading of 100 is considered healthy.

The Realtors' group also released revised data for 2011. That lowered November's initial 19-month high of 100.1 to 96.9. But contracts have been markedly up since the summer when some feared a second recession loomed.

Contract signings typically indicate where the housing market is headed. There's a one- to two-month lag between a signed contract and a completed deal.

A sale isn't final until a mortgage is closed. One-third of Realtors complain that they've had at least one contract scuttled in January, December, November and October, according to the Realtors' group. That's up from 18 percent of Realtors in September.

Nonetheless, the gain in signed contracts supports other evidence of improvement in the housing market.

Pierre Ellis, an economist at Decision Economics, said home sales and building is in the midst of "ongoing general, but gentle, progress."

Builders are growing more optimistic after seeing more people express interest in buying this year. Sales of previously occupied homes are at their highest level since May 2010. More first-time buyers are making purchases. And the supply of homes fell last month to its lowest point in nearly seven years, which could push home prices higher.
Homes are the most affordable they've been in decades. And mortgage rates have never been cheaper.

Much of the optimism has come because hiring has picked up. More jobs are critical to a housing rebound.

"Easier mortgage lending criteria, very low rates and the improving labor market are all contributing to the beginnings of a real upturn in home sales, if not yet prices," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

Sales may also be rising because of an April deadline for higher mortgage application fees for Fannie Mae and Freddie Mac-backed home loans. The government-controlled mortgage buyers own or guarantee about half of all U.S. mortgages and 90 percent of new loans, and have been telling customers to submit their applications now.

Analysts caution that the damage from the housing bust is deep and the industry is years away from fully recovering.
Potential buyers are holding off for a number of reasons. High unemployment and weak job growth have deterred many potential buyers. Loans are harder to come by. Lenders are requiring bigger down payments and strong credit scores to qualify.

Even those with good credit and stable finances are hesitant to buy out of concern home prices will keep falling.

For Buying or Selling, it helps to have a guide that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.

California January Home Sales

February 16, 2012

An estimated 28,111 new and resale houses and condos were sold statewide last month. That was down 25.5 percent from 37,734 in December, and up 1.5 percent from 27,706 for January 2011. A decline from December to January is normal for the season. On a year-over-year basis sales have increased the past six months. California sales for the month of January have varied from a low of 19,145 in 2008 to a high of 47,138 in 2004, while the average is 31,717. DataQuick's statistics go back to 1988.

The median price paid for a home last month was $236,000, down 4.1 percent from $246,000 in December, and down 1.3 percent from $239,000 for January a year ago. The median has decreased on a year-over-year basis for the last 16 months. The bottom of the current cycle was $221,000 in April 2009, while the peak was $484,000 in early 2007.

Distressed property sales – the combination of foreclosure resales and “short sales” – continued to make up more than half of California’s resale market.

Of the existing homes sold last month, 34.5 percent were properties that had been foreclosed on during the past year. That was up from a revised 33.9 percent in December and down from 40.4 percent in January a year ago. The all-time high was in February 2009 at 58.5 percent.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 21.4 percent of resales last month. That was up from 19.6 percent in December and up from 18.7 percent in January 2011. Two years ago short sales made up an estimated 18.1 percent of the resale market.

The typical mortgage payment that home buyers committed themselves to paying last month was $893. That was the lowest since $882 in February 1999. Adjusted for inflation it was the lowest since at least 1988 .

Indicators of market distress continue to move in different directions. Foreclosure activity is high, but well below peak levels. Financing with multiple mortgages is low, down payment sizes are stable, and cash and non-owner occupied buying remain at or near record levels, DataQuick reported.

Source: DataQuick; DQNews.com

Home Bargains Abound, But Willing Lenders Are Rare Breed

By Annamaria Andriotis

Faced with finicky lenders, would-be home buyers are increasingly turning to Dad, Grandma or rich Uncle Barton—even perfect strangers they met online. While these solutions are understandable, given the abundant bargains on the market, they also present significant risks.

This year, one-third of first-time home buyers received a cash gift or a loan for a down payment from family or friends, according to the National Association of Realtors. That is up from a historical average of 27%.

Meanwhile, so-called peer-to-peer lending sites Prosper and Lending Club say demand for home-related financing is on the rise. And Weemba, a social-networking site, launched a platform in September to connect lenders directly with prospective home buyers and other borrowers.

Driving the demand, say financial advisers, is that despite rock-bottom mortgage rates around 4%, traditional lenders remain reluctant to provide mortgages to anyone with less than stellar credit. And in certain markets lenders are requiring down payments of more than 20% of the home's purchase price.

Scott Nguyen, a human-resources analyst, was denied a mortgage by several banks before getting a $15,000 loan from his mother and sister to use as a down payment on a home in Costa Mesa, Calif. Mr. Nguyen says he has agreed to pay off the loan on a monthly basis over three years, and will end up paying $3,000 in interest.

"Without my mom and my sister's help, I don't think I would have been able to buy the house that I did," he says.

In so-called intrafamily loans, the borrower often saves on interest since parents are likely to charge less than the banks, says Michael Garry, a fee-only financial planner in Newtown, Pa. And parent lenders can earn a higher return from their child's interest payments than they would on a certificate of deposit or money-market fund. Under federal law, on a loan of more than nine years, parents in most cases must charge at least roughly 2.8%.

Of course, intrafamily loans can upset the family dynamic.

Jonathan Bergman, a certified financial planner at Palisades Hudson Financial Group in Scarsdale, N.Y., recommends that parents be clear about how repayment will work. In some cases, it may even make sense to hold back on future monetary gifts or inheritance if it isn't repaid. "The power of the parents' purse is strong," he says.

Consumers who want to look beyond the family can apply at online sites like Lending Club and Prosper. If approved for a loan after a screening by the companies, applicants may then receive money from investors.

At Miami-based Weemba, some 3,000 registered users have started posting loan proposals during the past couple months. Thirty companies including banks and credit unions—up from just a dozen in September—review the applicants and directly contact those they are interested in.

However, these alternative routes to financing can be expensive for borrowers. Rates at Lending Club run from around 7% to 28%, and at Prosper from roughly 7% to 35%. The companies say these rates, which are fixed, are higher than traditional mortgage rates in part because their loans are unsecured.

For Buying or Selling, it helps to have a guide that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at rashid@rashidrealty.com. More to follow within the next couple of weeks.